Families First Coronavirus Response Act: Guidance For EmployersMarch 19, 2020
The Families First Coronavirus Response Act, which was passed by the House of Representatives earlier this week, was passed by the Senate yesterday, March 18, 2020. The Act will take effect April 2, 2020. Employers covered under this relief bill will receive tax credits to allow them to provide enhanced benefits to those employees affected by COVID-19. Here is our summary of the key provisions of the Act that will impact employers.
1. Emergency Family and Medical Leave Expansion Act
- The Emergency Family and Medical Leave Expansion Act temporarily expands FMLA leave for eligible employees of employers with fewer than 500 employees if:
- the employee is unable to work (or telework) because the employee needs leave to care for the employee’s son or daughter under 18 years old due to the closure of the child’s school or place of care or because childcare is unavailable due to COVID-19.
- Eligible employees are those who have been on the job for at least 30 days.
- The first 10 days of the expanded FMLA is unpaid.
- Employees can elect to substitute paid leave (accrued vacation, personal and/or medical/sick leave) for this unpaid portion.
- After the first 10 days, the employer is required to pay employees an amount that is no less than 2/3 of an employee’s regular rate of pay.
- Paid leave is capped at $200 per day and $10,000 in the aggregate.
- Small businesses with less than 50 employees may be exempt where it would jeopardize the viability of the business as a going concern.
- The FMLA’s job protection rules apply to the expanded FMLA, except that there is a hardship exemption for employers with less than 25 employees.
2. Emergency Paid Sick Leave Act
- The Emergency Paid Sick Leave Act requires employers with fewer than 500 employees to provide emergency paid sick leave.
- Employees are immediately eligible for this paid sick leave, but paid sick leave under this relief bill will not carry over to the next year, and is not required to be paid at termination of employment.
- Full-time employees are entitled to 80 hours (two weeks) of paid sick leave, and part-time employees are entitled to paid sick leave in an amount equivalent to the amount of hours they would normally be scheduled to work during a two-week period.
- Paid sick leave shall be paid at the employee’s regular rate if taken for because the employee: (1) is subject to a federal, state or local quarantine or isolation order related to COVID-19, (2) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19, or (3) is experiencing symptoms of COVID-19 and seeking a medical diagnosis. Paid sick leave under this section is capped at $511 per day and $5,110 in the aggregate.
- Paid sick leave shall be paid at 2/3 of the employee’s regular rate if taken: (1) to care for an individual who either is (a) subject to a federal, state or local quarantine or isolation order related to COVID-19 or (b) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 quarantine or self-isolation, (2) to care for a child whose school is closed or childcare provider is unavailable due to COVID-19 precautions, or (3) because the employee is “experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.” Paid sick leave under this section is capped at $200 per day and $2,000 in the aggregate.
- Employers are required to pay this sick time in addition to any other paid leave, and may not (1) require employees to use other paid leave before using this leave, (2) require employees to find another employee to cover their hours, or (3) change their paid leave policies now to provide less leave.
3. Unemployment Emergency Insurance and Tax Credits
- The relief bill provides additional funding for unemployment insurance benefits to states. It also provides tax credits (against the employer's portion of social security taxes) for the expanded FMLA wages and amounts paid as emergency sick leave wages.
For more information on this issue or other employment matters, please contact:
Carol M. Goodman at +1 212 592 1465 or [email protected]
Meaghan Roe at +1 212 592 1632 or [email protected]
Silvia Stockman at +1 212 592 1583 or [email protected]
Heather M. Zimmer at +1 212 592 1477 or [email protected]
© 2020 Herrick, Feinstein LLP. This alert is provided by Herrick, Feinstein LLP to keep its clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The information is not intended as legal advice or legal opinion and should not be construed as such.